INCOME TAX ASSESSMENT ACT 1997 - SECT 242.10 Application

INCOME TAX ASSESSMENT ACT 1997 - SECT 242.10

  (1)   This Division applies to a * car that:

  (a)   is leased (but not under a * short - term hire agreement or a * hire purchase agreement) for consideration; and

  (b)   was a * luxury car when the lessor first leased it; and

  (c)   is not * trading stock of the lessee; and

  (d)   is not a car covered by subsection   40 - 230(2) (about cars modified to carry individuals with a disability).

  (2)   The provisions of this Division do not have effect for the purposes of Division   11A of Part   III of the Income Tax Assessment Act 1936 (about withholding tax on dividends, interest and royalties).

Note:   This subsection prevents interest on the notional loan that this Division creates being subject to withholding tax under Division   11A.

  (3)   For the purposes of paragraph   (1)(a), the question whether an agreement is a * short - term hire agreement is determined on the basis that an employee or employer of an entity is an * associate of the entity.

Note:   Under the definition of short - term hire agreement in subsection   995 - 1(1), successive agreements for the hire of the same asset to an entity or its associates are not short - term hire agreements if they result in substantial continuity of hiring.